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Importance of Cash Flow Estimation

According to one website, cash flow estimation is a must for assessing the investment decisions of any kind. To evaluate these investment decisions there are several principles of cash flow estimation that must be taken into consideration. This concept and its principles will be the subject of this week's assignment. Using this websites:

http://finance.mapsofworld.com/corporate-finance/cash-flows/principles-estimation.html
www.ds-finance.com/dcfcf.pdf and other resources, please respond to the following questions.

1. What is the concept of cash flow estimation?
2. What are the steps in the process?
3. What are the advantages and disadvantages of this concept?
4. Why are negative earnings a problem?
5. According to the finance website, what are the 4 principles that must be considered when computing cash flow estimation? (Identify and discuss each one).
6. Provide an example of when this would be used in health care?

Solution Preview

Health Care Finance
According to one website, cash flow estimation is a must for assessing the investment decisions of any kind. To evaluate these investment decisions there are several principles of cash flow estimation that must be taken into consideration. This concept and its principles will be the subject of this week's assignment. Using this websites:
http://finance.mapsofworld.com/corporate-finance/cash-flows/principles-estimation.html
www.ds-finance.com/dcfcf.pdf and other resources, please respond to the following questions.
1. What is the concept of cash flow estimation?
Cash flow estimation are revenue or expense that changes a cash account over a given period of time. Cash inflows arise from three activities: financing, operations, and investing. Although this occurs as a result of donations or gifts in case of personal finance. Cash outflows result from expenses or investments.
2. What are the ...

Solution Summary

Cash flow estimation are revenue or expense that changes a cash account over a given period of time. Cash inflows arise from three activities: financing, operations, and investing.

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